WHA Ltd & Anor v Revenue and Customs

WHA Ltd & Anor v Revenue and Customs

The Scheme was abusive because its essential and sole aim was to obtain a tax advantage contrary to the purpose of the Sixth Directive, specifically by enabling recovery of input VAT in the context of exempt insurance services through artificial group arrangements. The abuse principle applies even where domestic law...

Source-derived case information.

Parties
Respondent: WHA Ltd & Anr; Appellant: HM Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
17 July 2007
Procedural Posture
Civil Appeal / Court of Appeal Judgment on VAT Abuse Following Remittal From High Court
Outcome
Appeal allowed; Scheme held abusive; Tribunal's decision reinstated
Legal Topics
Value Added Tax (vat), Abuse of Rights, Input Tax Recovery, Insurance/reinsurance Arrangements, Fiscal Neutrality
Tax Law European Union Law Value Added Tax (vat) Abuse of Rights Input Tax Recovery Insurance/reinsurance Arrangements Fiscal Neutrality

Source-derived case record

Summary, issues, holding and outcome

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Parties

WHA Ltd & Anr

Respondent

HM Revenue and Customs

Appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on VAT Abuse Following Remittal From High Court

Legal Issues

  1. 1 Whether the Scheme involving WHA, Viscount, and Crystal constitutes an abusive practice under EU VAT law as interpreted in Halifax plc v Customs and Excise Commissioners
  2. 2 Whether the essential aim of the Scheme was to obtain a tax advantage contrary to the purpose of the Sixth Directive
  3. 3 Whether the Scheme should be redefined to neutralise the abusive effect

Ratio Decidendi

The Scheme was abusive because its essential and sole aim was to obtain a tax advantage contrary to the purpose of the Sixth Directive, specifically by enabling recovery of input VAT in the context of exempt insurance services through artificial group arrangements. The abuse principle applies even where domestic law steps are involved, and the Scheme must be neutralised for VAT purposes.

Court Disposition

Appeal allowed; Scheme held abusive; Tribunal's decision reinstated

Orders

  • Scheme declared abusive and ineffective for VAT purposes
  • No entitlement for Viscount to recover input VAT paid by WHA